MILLIONS of savers are due a windfall worth an average of £9,470 because they’re missing out on a lost pension pot.
Losing track of your pension could see you miss out on thousands of pounds of your own hard-earned cash in later life.
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You can avoid a lost pension pot headache by hunting it down now, PensionBee chief executive Romi Savova said.
It’s estimated that around 2.8million pensions have been misplaced or forgotten about in the UK, according to new research from the Pensions Policy Institute.
With £26.6billion stashed away in these lost pots in total, it means each one is worth an average of £9,470.
The number of lost pensions has increased by 75% over the last four years, meaning more savers are losing track of retirement cash.
Here are Romi’s top tips for taking back control of yours.
She’s one of The Sun’s Squeeze Team experts, here to help guide you through a crippling cost of living crisis.
If you’re worried about making ends meet, are struggling to pay off your debts or don’t know how best to manage your cash, get in touch by emailing [email protected].
How to track down your cash
If you’ve lost track of a pension, you’ll need to gather all the documents you have for the account.
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You should get annual statements sent by post to your address.
If you see pension providers you don’t recognise, get in touch with them as they can tell you about any account you may have – and how much is in it.
Contact your old employers who will help you find which pension provider you signed up with.
Otherwise, you can use the government’s free Pension Tracing Service.
This lets you search a database of hundreds of thousands of pension scheme contact details to find your provider.
You can search online by entering the name of your employer or old pension provider.
The service will tell you who managed your old company’s scheme and you will then need to contact them.
How to avoid losing your pension pot
Retirement may seem a long way off, but keeping control of your pension means you can protect your hard-earned cash.
Romi outlined four top tips for keeping your finances in check.
Keep contact details updated
Your pension provider will send you an annual statement about your account to your address.
It means if you don’t update your personal contact details, you won’t get these important documents.
“If a provider is unable to contact a saver, they will stop sending correspondence, resulting in savers missing out on vital information about their savings,” Romi warned.
“It may be a sensible idea to offer secondary contact details as a backup option too.”
Make sure you let your pension provider know of any changes to your address, phone number, and email address, for example.
If you get married, make sure you inform your provider of any name change too.
Keep hold of paperwork
Keeping hold of pension paperwork can be a challenge – especially if you’re tight on space.
But finding somewhere to store it means you can easily access details about your retirement cash later in life.
“These documents contain all the vital information associated with a pension, such as the pension provider’s name, the policy number and any additional benefits the saver may receive upon retirement, such as a guaranteed annuity rate,” Romi said.
Consider consolidating your pension
If you switch jobs a lot, you may end up with multiple pension pots – but if you consolidate them, they’re easier to keep track of.
“It is a good habit for savers to find and consolidate old workplace pensions into a personal pension each time they change jobs,” Romi said.
“This way their personal pension becomes their ‘home’ pot, which they will keep until retirement, and they will only ever have to manage this and a current workplace pension.”
If you are moving an old pot though, do check all the details – older so-called defined benefit pension schemes may have valuable perks that you’ll lose if you switch.
It’s usually worth taking professional advice if you have one of these.
You should also not be tempted to withdraw money from a pension at too young an age (usually before 55) or you could have to pay up to 55% tax on the cash.
We explain how much you’ll need for a comfortable retirement.
Plus, here’s how to boost your pension pot by thousands of pounds without saving a penny more.
